Apple on Sony Reader: "We Have Not Changed Our Guidelines"

11.2 Apps utilizing a system other than the In App Purchase API (IAP) to purchase content, functionality, or services in an app will be rejected
11.3 Apps using IAP to purchase physical goods or goods and services used outside of the application will be rejected

–Apple’s App Store Review Guidelines

Apple rejected Sony’s Reader iPhone app from the App Store this week in a move that the New York Times portrays as Apple “further tightening its control of the App Store.” And if, as the Times claims, Apple’s rejection of the Reader app meant that Sony and others like it could no longer sell content from their apps or offer customers access to purchases made outside the App Store, it would have been just that. A sudden upending of App Store guidlines that would have broad implications for consumers and popular apps likes Kindle, Netflix, Pandora, Dropbox, Hulu Plus and others.

But that’s not quite what’s happened–not quite.

Apple’s made no change to its App Store guidelines–it’s simply enforcing a rule that’s been in them all along: Apps that allow their users to purchase content, functionality or services must use Apple’s In App Purchase API. “We have not changed our developer terms or guidelines,” company spokesperson Trudy Muller told me. “We are now requiring that if an app offers customers the ability to purchase books outside of the app, that the same option is also available to customers from within the app with in-app purchase.”

In other words: You don’t have to buy books, or music, or other media that you consume on iOS apps from Apple. But developers must offer you the option to buy that stuff through Apple and its iTunes-backed system.

Which means Apple is either trying to boost its revenues–it will take a 30 percent cut of all transactions conducted on iOS devices–or it’s trying to make the iOS ecosystem much less pleasant for certain outsiders; note that Muller’s statement is specific to books.

Neither strategy makes much sense, though: Apple’s iTunes revenues are big, but insignificant for a company its size–Apple uses iTunes to sell hardware, not to make money selling media.

And it was one thing to play hardball with Sony, Amazon and other big players when Apple owned the smartphone market. But Google’s Android OS has evolved into a formidable competitor. Why give people a reason to head there?

So this is a big change for folks like Amazon, Sony and others who must now support the option of buying content in-app, but not that big a change for consumers–assuming folks like Amazon, Sony and others play ball and update their apps according to this newly enforced guideline. On the consumer end, it’s largely a back-end change–again, assuming third-party content peddlers accept the change and the mandate that they must now give Apple a 30 percent cut of in-app sales. In fact, one could argue that it’s an enhancement. Assuming there’s no surcharge on them, in-app purchases are certainly more convenient than those that require loading a Web store in Mobile Safari.

How developers handle this going forward is going to be interesting. Some may well find the idea of paying Apple a percentage on sales made on iOS devices entirely untenable. Other’s may seek a way around it–a 30 percent surcharge on in-app purchases, for example–if such things are allowed.

UPDATE: An entirely hypothetical scenario based on my understanding of these issues. One caveat: my … murky understanding of these issues.

If you want to sell content from within an iOS app, you must now use the In App Purchase API and give Apple its cut of the sale.

Amazon’s Kindle app for iOS currently allows users to purchase books by launching a store in Mobile Safari. Now that Apple is enforcing the guideline described above, it can no longer do that.

Therefore it must either:
a. update the app to support in-app purchases through Apple.
b. update the app to disable out-of-app purchases via a mobile safari store.
c. rethink its iOS device strategy, perhaps telling Kindle App users that they must make Kindle purchases on the Web or Kindle hardware. Remember, “Buy Once, Read Anywhere” …

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